"Due to fast-growing steel output and steadily rising steel prices, steel makers in the domestic market saw a great rise in profits in the first three months of the year," said an official with NDRC.

The steel output growth was attributed to the rapid growth of demand from major steel-consuming industries, and robust demand in the world markets. CRU Steel Price Index, the leading indicator of steel market trends, reached 160.7 at the end of March, up 22.5 points or 16.3 percent year on year.

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According to the report, exporting low-end steel products wastes a lot of energy and contaminates the environment. The steel sector accounts for 15 percent of the country's total energy consumption and discharges 14 percent of the total pollutants. The government will modify its policy to deal with environmental pollution in this sector.

China has also adjusted its export policy to inhibit the excessive growth of the steel sector, the report stated.

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